Subject: Information on Paying Off Credit Card Debt and Credit Score
Tue Oct 13, 2009 5:29 pm
We have recently paid off some credit card debt. How long will it take to effect (positively) our credit report and how positively will it effect it? (It was about $30K in Credit Cards - total). Thanks
Congratulations!! You have paid off your debts. It will definitely affect your credit report and score positively. However, it takes a little time for your credit report to get updated and reflect all the changes. You have to wait for at least 3 months to find out the changes in your credit report. However, the time of updating reports is not universal. It depends on the respective credit bureaus. It is not possible to say the exact points by which your score will improve, but it will go up by considerable number of points. _________________ All the Best
Generally the credit reporting cycle is 90 days.So even if they update your record within 14 days, it is likely that it will not show up on your credit report until the next cycle. Many of the larger banks and finance companies report updated information to the credit bureaus every month.
Your credit rating is calculated based on several variables, including:
1) Payment history, which counts for approximately 35% of your score, is the most heavily weighted factor used in calculating your credit score. Consistently paying your bills on time has a positive influence on your score, while late or missed payments will hurt you in this area.
2) Total debt and total available credit, which counts for about 30%. This section looks at how much debt you have compared to the total available credit on your accounts.
3) Length of positive credit history, which counts for about 15%. The longer you maintain accounts in good standing, the better your score will be. This shows that you are able to make a long-term commitment to a creditor and are consistently responsible about making your payments.
4) Mix of types of credit, which counts for approximately 10%. Having several different types of credit, such a credit cards, consumer loans, and secured debt, will have a positive influence on your credit score. Having too much of one type of credit can have a negative impact.
5) The number of new credit applications you have recently completed, which accounts for about 10% of your score.
Your personal details (name, email address and phone number) will be delivered to the company advertised on the Creditmagic after ve agreed to go for the counseling session by filling out the no-obligation form. However, it is your discretion to accept or reject their services.
Not all the creditors/debt collectors agree to trim down the outstanding balances, interests, and fees payable by the consumer.
Consumers working with the debt relief companies can still be sued by the creditors/collection agencies.
Debt relief services may have a diminishing effect on the creditworthiness of the consumer. The total outstanding balance may increase as the additional fees get accrued.
The overall amount saved by the consumer through the debt relief services is considered as taxable income by the IRS.